So what where the reasons behind the housing bubble in the first place. Well greed and stupidity where really big reasons. But...the real reasons were a special kind of derivative (1) "called a credit default swap on sub prime ARM pools", was that a mouth full to say. Now ARM (1)"means adjustable-rate mortgage, and sub prime means the borrower has a low credit rating. My question on this is why would any lender, lend money to anyone with a low-credit-rating? Isn't that really stupid? (1)These derivatives doubled in price between mid-September and December of 2005. They sold mortgages like this to thousands of low-credit-rating borrowers. Plus according to the White House the main players in this current financial disaster where hedge-funds that specialized in debt-trading and the housing market was overpriced as well. Plus the quality of home borrowers deteriorated. All of these factors started happening around 2006.
So because of all the lies and B.S, but...also because of all the shitty unstable borrowers whom where allowed to borrow money in the first place. The housing market eventually imploded in on its self. Dirty investors knowingly lent money to cruddy borrowers. These same lenders came up with cutting (1)financial-instruments, that protected the buyers. Knowing damn well that billions of homeowners would be defaulting on there overpriced loans. For a while greedy investors really where cleaning house, as those derivatives rose, even as slumping housing sales fell. These greedy-dip-shit-lenders, only thinking of their pockets are a major reason behind are current recession. Or...as I like to call it our depression.
(2)OK there's also something called hedge funds (3.this is the definition of a hedge fund, its it's a flexible investment for a small number of large investors. Usually the minimum investment is $1 million; they can use high-risk techniques, that are not allowed for with mutual funds. Such as short-selling and heavy leveraging), hedge funds are held by large institutional investors, and by foreign banks. All of which has also helped our current nationwide recession. Concerns about the impact of the collapsing housing and credit markets, on the larger U.S. economy. Caused President George W. Bush and the Chairman of the Federal Reserve Ben Bernanke. To announce a limited bailout of the U.S. housing market, for homeowners who were unable to pay their mortgage debts. OK it gets even more complected party people.
So how many people do you think have gone to a federal prison because of this lending disaster? Here's the answer for you. It's really going to piss you off, (4)despite the millions of ridiculous mortgages, that were made during the peak years of the housing bubble, and despite the billions of dollars of profits raked in by Wall-Street and Mortgage Firms like Countrywide. And...despite the ensuing financial crises which almost brought on a 2nd great depression. NO ONE has really been held criminally responsible! With the small, small exception, of a couple of mortgage investors on Wall Street. Actually both of those greedy S.O.B's were acquitted--because no one was ever charged with a crime. These criminals really know how to cover their tracks.
So When this disaster took place and President Obama took office he gave this speech;
(5)PRESIDENT OBAMA: I'm here today to talk about a crisis unlike any we've ever known – but one that you know very well here in Mesa, and throughout the Valley. In Phoenix and its surrounding suburbs, the American Dream is being tested by a home mortgage crisis that not only threatens the stability of our economy but also the stability of families and neighborhoods. It is a crisis that strikes at the heart of the middle class: the homes in which we invest our savings, build our lives, raise our families, and plant roots in our communities.
So many Americans have shared with me their personal experiences of this crisis. Many have written letters or emails or shared their stories with me at rallies and along rope lines. Their hardship and heartbreak are a reminder that while this crisis is vast, it begins just one house – and one family – at a time.
It begins with a young family – maybe in Mesa, or Glendale, or Tempe – or just as likely in suburban Las Vegas, Cleveland, or Miami. They save up. They search. They choose a home that feels like the perfect place to start a life. They secure a fixed-rate mortgage at a reasonable rate, make a down payment, and make their mortgage payments each month. They are as responsible as anyone could ask them to be.
But then they learn that acting responsibly often isn't enough to escape this crisis. Perhaps someone loses a job in the latest round of layoffs, one of more than three and a half million jobs lost since this recession began – or maybe a child gets sick, or a spouse has his or her hours cut.
You can't afford to leave and you can't afford to stay. So you cut back on luxuries. Then you cut back on necessities. You spend down your savings to keep up with your payments.& Then you open the retirement fund. Then you use the credit cards. And when you've gone& through everything you have, and done everything you can, you have no choice but to default on your loan. And so your home joins the nearly six million others in foreclosure or at risk of foreclosure across the country, including roughly 150,000 right here in Arizona.
But the foreclosures which are uprooting families and upending lives across America are only one part of this housing crisis. For while there are millions of families who face foreclosure, there are millions more who are in no danger of losing their homes, but who have still seen their dreams endangered. They are families who see "For Sale" signs lining the streets. Who see neighbors leave, and homes standing vacant, and lawns slowly turning brown. They see their own homes – their largest single assets – plummeting in value. One study in Chicago found that a foreclosed home reduces the price of nearby homes by as much as 9 percent. Home prices in cities across the country have fallen by more than 25 percent since 2006; in Phoenix, they've fallen by 43 percent.
So what happened to all those poor bastards, that got stuck with these mortgages they couldn't pay or became unemployed because of the recession?
First a man talking to a News Reporter said:
(6)We don’t know what the hell happened? We lost over 45% of the worth of our home and our 401k lost almost 30%, even though we were in solid blue chip companies. We DID EVERYTHING RIGHT and yet we are still going to lose our home on Friday. God I feel so God Damned stupid!!! I’m pretty sure this knot will hold my weight, I never want to see my wife cry like that again, how did it all go so wrong so fast..
So what kind of hell are Americans going threw, because of these greedy, stupid, Wall Street investors. The same investors that will never do any federal prison time, for their crimes.
Here's the facts for you about what happening to Americans in America in 2010 because of the housing bubble, the recession, and because of unemployment;
(7)According to the resent censuses, 18.6 million homes are now vacant in the U.S. 23 million people have lost their homes, 300,000 new foreclosures happen every month now. According to RealtyTrac's records. Lender Processing Services (LPS)reported that in the month of November, 261,153 loans were referred to foreclosure. While in October there were 279,433 with One-third of these home owners not being able to make their mortgage payment in at least a year. 1 in 7 American families have defaulted on their mortgages. But...are temporarily being allowed to stay in their homes, because... the Banks know that the market is flooded with foreclosed houses. They are simply waiting before kicking these families, out on to the street. Eight Million more Foreclosures Are About To Hit the Market in 2011-2012.the unemployment rate is 9.8%. With more than 15.1 million people out of work! Labor data shows people who have been unemployed for fewer than five weeks will face a re-employment rate of only 31%. Those who have been unemployed for more than a year, there's just a 9% chance that you'll find a job at all. The Government is hiding the fact that 330 thousand people are running out of unemployment cash each month. These people can't find a job! 6.3 million people have run out of unemployment! There's also another 4 million people that will run out of unemployment in 2011. Once they have reached their 99th week of unemployment they will be thrown off the unemployment rolls and will no longer be counted among the unemployed, thus the unemployment number will go down. The reality of becoming a 99er your existence is erased in 99 weeks. These people will lose their homes. Many will become homeless. Forty percent of the world’s wealth has been destroyed in the last two years. Stocks and retirement savings have lost half of their value, and as a result the average American has less than 10,000 dollars left for their retirement. Six trillion dollars of savings that had belonged to the American working class, has been transferred into the hands of the elite. In another two years, over 40 million Americans will have lost their homes, and people will have spent all of their savings, and millions of men women and children will be homeless! More than half of students graduating from college can not find a job or pay back the 900 billion dollars in loans that they have borrowed to finish their education.
All of which will lead to more unfortunate individuals in America who will commit suicide. I hope something is done soon about our weak economy. Maybe America could bring jobs to this country and stop worrying about whats going on in the Middle East. Can the future be changed, because it's really starting to look pretty bleak. Hopefully President Obama will get on our country's economic problems handled. I really hope so don't you. That's the end of this deep though moment...
http://www.salon.com/technology/how_the_world_works/2006/04/18/credit_swaps
(2)http://en.wikipedia.org/wiki/United_States_housing_bubble
(3)http://www.google.com/search?hl=en&defl=en&q=define:hedge+fund&sa=X&ei=ozmSTcxbh7qxA-Hy8asO&sqi=2&ved=0CCEQkAE
(4)http://www.businessinsider.com/charlie-engle-2011-3
(5)http://homeless-disappear.blogspot.com/
(5)http://www.cbsnews.com/8301-503544_162-4809296-503544.html
(6)http://dailyeconomicupdate.wordpress.com/2011/03/13/in-praise-of-panic/
(7)http://homeless-disappear.blogspot.com/
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